These days, high-end Manhattan condo conversions are as quotidian as eight-figure listings. But with soaring prices for properties in Brooklyn’s leafier neighborhoods, some of the borough’s pre-war multi-family rental buildings are getting Manhattan-style makeovers.
In Park Slope and Carroll Gardens, the Manhattan-based developer East River Partners is currently buying up and gut-renovating non-rent regulated multi-family buildings throughout the area. In the past year and a half, the firm has scooped up three multi-family buildings in Park Slope and one in Carroll Gardens. The company is in the process of transforming the buildings into 900- to 2,000-square-foot, two and three bedroom condominiums — units designed to lure Brooklyn’s Bugaboo stroller-pushing set.
“Rents are so strong in Brooklyn now — and interest rates so low — that the monthly cost for our buyers of owning a home can be roughly half the cost or renting once they take into effect the deduction of interest from their taxes,” East Rivers Partners principal Jody Kriss said, explaining why the firm is intent on buying up and converting Brooklyn buildings.
Kriss, together with Joseph Cohen, recently formed East River Partners to buy up and convert prime Brooklyn properties. Prior to founding the company, Kriss was a developer of high-profile Manhattan projects, including Trump Soho, and Cohen acted as the head of acquisitions at Maxx Properties.
And while the success of their Brooklyn model is still being tested, the firm has had some early victories. For instance, East Rivers’ recently converted multi-family building at 397 First Street, between Sixth and Seventh avenues, in Park Slope, which came on the market in July, has four of its seven units in contract. Asking prices on the remaining three apartments range from $829,000 to nearly $1.3 million.
Just four blocks southwest of 397 First, East River purchased another prewar multi-family building at 371 Sixth Avenue, between 5th and 6th streets, for $1.75 million in March, according to public records; beginning in October, the four-unit property is set to undergo a renovation similar to that at 397 First. And construction recently got underway at 364 Union Street, at Smith Street, in Carroll Gardens; East River picked up the Carroll Gardens property in April for $2.5 million, public records showed. Construction on both projects is expected to wrap up next year, and pricing will be similar to units at 397 First, Kriss said.
In addition, East River is in contract to buy yet another Park Slope property at 432 10th Street, between Fifth and Sixth avenues, for an undisclosed amount; the three-story building is listed for nearly $1.6 million with Century 21 Block & Lot’s Mike Hasan.
Converting multi-family buildings in Park Slope on this scale is fairly unique, due to the limited supply of non-rent controlled properties, according to Seth Brown of Aspen Equities, who is not involved in East River’s deals. Competition isn’t coming primarily from other firms looking to buy swaths of rental buildings, but from families looking to convert townhouses into grand multi-million dollar homes, he said.
East River management says that they see brownstone Brooklyn neighborhoods as a safe bet — given the proximity to Prospect Park, to well-regarded public schools, to popular restaurants and upscale retail. “We have been extremely pleased with the market’s reception to what we’ve built,” Cohen said. “So far, all of the units we’ve sold have been at or over the asking price.”